Selling your business is one of the biggest decisions you’ll ever make. It’s not just a financial transaction, it’s the closing chapter of something you built from the ground up. The late nights, the risks, the wins, the lessons; all of it comes together in this moment.
When someone is willing to pay good money for what you’ve created, it’s more than a sale. It’s validation. It’s proof that what you built has real value in the market and that’s a feeling you can’t put a price on.
When someone is willing to pay “good money” for something you have built from scratch, there is a different sense of worth and accomplishment – CRANKY BOSS
⏱️ Estimated reading time 12 minutes.
Whatever your goal, whether it’s closing your doors, retiring early, selling, merging, or passing your business on to family, you need a clear exit strategy. And here’s the kicker: it shouldn’t be an afterthought. Your exit plan should be part of your initial business plan.
Having an exit strategy gives you direction. It helps you focus on profitability and efficiency, both of which increase the overall value of your business.
Selling my business was always part of the bigger plan when I first started. It was the end goal, the cherry on the cake.
But I also knew it wouldn’t be easy. A successful sale takes time, proof of profit, strong financials, and something every buyer looks for: goodwill.
Knowing When to Sell is Important
In 2014, we decided to start manufacturing the very products we’d been successfully selling for eight years. That was the moment I saw the end game; the beginning of the end.
Setting up our own manufacturing facility made perfect sense. It gave us complete control over production, quality, and timing. We were no longer relying on anyone else; we were running the entire show. It changed everything.
We held a different type of authority in the industry. It was a game-changer.
Manufacturing bought enormous challenges and risks with it, but it was an asset and a great value to the business. One year later, we purchased the premises as well. This was now the complete picture.
I gave myself a timeline of 5 years – and that by 2020, ideally, I would have loved to see an exit. But 2020 had a mind of its own.
You guessed it – the year of Covid!
Still, one year later, after months of lockdowns and uncertainty, the sale went through smoothly. The timing, the structure, and the preparation all paid off.
This is how I did it.
The Experts You’ll Need
When it comes time to sell your business, surround yourself with the right people. You’ll need:
- A Good Business Broker
- Your Accountant
- A Lawyer experienced in business sales
Ideally, these professionals have worked together before. One can usually recommend the other; and trust me, that makes everything run like clockwork. When I sold my business, that connection between them made all the difference.
Things moved fast; exactly how they should. When you put your business up for sale, timing matters. You need to strike while the iron’s hot and momentum is on your side. There’s nothing worse than a deal ready to go but everyone sitting around waiting for documents because your lawyer or accountant isn’t in sync.
If your broker recommends a lawyer they’ve worked closely with before, take the advice. Go with the team that already has rhythm. It gets the job done.
Our first meeting was in May. By June, the business was on the market. By November, it was sold and settled. That’s how smooth it can be when the right people are in your corner.
Keep in mind that a typical sale process can take around 6 to 12 months, depending on your business size, structure, and market demand; so plan ahead and get your experts involved early.
What You Should Prepare Well in Advance
Preparation is everything when it comes to selling your business. The more groundwork you do, the faster and smoother the sale will be. Here’s what to focus on:
1. Show consistent profitability.
Aim for at least three solid years of profit; five is even better. This builds confidence and gives buyers proof that your business performs well over time.
2. Start trimming costs.
Reduce unnecessary expenses early. Every dollar saved now improves your profit margin later, and that directly boosts your valuation.
3. Build your online presence.
Increase your visibility on social media and online platforms. A strong, active presence helps potential buyers see your brand as credible and growing.
4. Clear your liabilities.
Get rid of any debts, warranty claims, or outstanding tax issues. Buyers don’t want to inherit baggage.
5. Recession-proof your business.
Build stability and resilience so buyers see your business as safe even in recessions or during economic downturns.
6. Resolve any legal matters.
Don’t start new legal proceedings, and tie up any open ones before going to market. Clean books, clean conscience.
7. Strengthen your team.
Your staff should be reliable, loyal, and capable of keeping operations running without you. A strong team is a big selling point.
8. Maintain your customer base.
Diversity is key. Multiple sales channels show buyers that your revenue doesn’t depend on one source.
9. Set aside staff entitlements.
Employee entitlements are payable at settlement, so plan for this early and keep those funds ready.
10. Understand your legal obligations.
If you’re in Victoria and your business sale price is under $500,000, you’ll need to complete a Section 52 statement. It includes your business’s financial performance and tax details. If your sale price is above that, you don’t need to complete one.
11. Be transparent with your financials.
Serious buyers will want to review your accounts in detail during due diligence. Make sure everything is accurate, easy to understand, and professionally presented.
12. Keep it real.
Be honest about your claims. Misleading information or fake reviews can come back to bite you. Authenticity builds trust and trust sells businesses.
13. Transferable business name.
Ensure your registered business name is transferable to the buyer. Remember, you’re selling the business name, not the company name.
Transferring a company name can be done, but it is highly complex, and it often involves meticulous planning from both sides.
What are you selling?
Before you put your business on the market, be absolutely clear about what’s on offer. Are you selling the entire business and all of its assets, or are there certain things you want to keep? Spell it out early to avoid confusion later.
If your business owns property, decide whether to include it in the sale. In many cases, selling everything as a complete package makes the deal more attractive to buyers and it’s cleaner and easier to finance.
Personally, I’ve always believed it’s best to separate yourself completely after the sale. Holding onto the building and collecting rent from the new owner might sound appealing, but it can create unnecessary complications. Clean breaks make for clean deals.
Your Business Broker & Beginning the Process
Choosing the right business broker is one of the most important steps in selling your business. The right broker can make the process smooth, strategic, and stress free. The wrong one can waste your time and money. Here’s what I looked for and what you should too:
- Check their licence. Make sure they’re legally licensed to operate as a business broker. No licence, no deal.
- Read their reviews. Look for consistent feedback, not just the perfect ratings. Reviews reveal how they actually work with clients.
- Check their credentials. Are they part of any professional associations or recognised industry bodies? It’s a good sign of accountability.
- Review their listings. See if they’ve handled businesses similar in size or industry to yours. Ask if they’ve sold something comparable before.
- Ask about their database. How big is it, and will they actively use it to find potential buyers? A good database is gold.
- Find out how many businesses they’ve sold recently. This gives you a sense of their current activity and success rate.
- Ask about their buyer strategy. How do they find buyers? What’s their approach to marketing and negotiations?
- Understand their fees. Ask about commission, any minimum fees, and whether marketing costs are included or additional.
- Clarify the exclusivity terms. How long will you be locked in, and what happens if you want to change brokers? Read the fine print.
- Discuss communication. How often will you get updates? Will they provide weekly reports or contact you as enquiries come in?
A good broker won’t just tick boxes; they’ll make you feel confident, informed, and in control from day one.
Getting Started with Your Broker
Once you’ve chosen your broker, you’ll sign an exclusivity agreement and pay the marketing costs to get the ball rolling. Always get everything in writing as it protects both sides and avoids misunderstandings later.
A good broker will prepare an Information Memorandum (IM). Basically, a buyer’s kit that presents your business in the best possible light. This document is detailed and comprehensive, covering everything a serious buyer needs to know. It typically includes your:
- Business profile and history, including key milestones
- Industry overview and market insights
- Financial statements and performance highlights
- SWOT analysis
- Key business strengths and selling points
- Staff structure
- Tangible and intangible assets
- Intellectual property
- Leases and agreements
This process can take a few weeks, so get your information organised early if you want things to move quickly. Once your IM is ready, your broker will list your business for sale.
Where should you list it? Everywhere that matters. You want your business visible wherever potential buyers are looking. Your broker will know the best platforms to use so let them lead the way.
Before potential buyers can access your Information Memorandum, they’ll usually need to sign a non-disclosure or confidentiality agreement. A good broker will screen these buyers carefully, collecting key details before sharing anything sensitive.
Their job is to protect your interests, keeping your information safe from competitors and curious onlookers 🐤, (sticky beaks) and weeding out non genuine buyers and time wasters. A good broker keeps things low profile but high impact.
Be Transparent and Choose the Right Buyer
Displaying a sale price on your advertisement is usually a smart move. It shows confidence and helps attract serious, qualified buyers. Being upfront and transparent is always the best approach and your broker should share that mindset.
If a potential buyer feels something doesn’t add up, they’ll walk away. Trust is everything in this process. One small inconsistency can undo months of progress.
At the same time, remember that selling a business isn’t a one way street. Be mindful of who you’re selling to. The process can take six months or more, and you’ll likely be in regular contact through your broker during that time and even after the sale. I worked with my buyers almost daily until settlement, then spent another four to six weeks helping with the handover.
Don’t just sell to anyone who waves a cheque. Make sure they’re professional, reasonable, and the kind of people you’d actually want to see continue what you’ve built. The right buyer isn’t just buying your business; they’re carrying on your legacy.
The first two offers I received were higher than the one I eventually accepted, but I turned them down. Money isn’t everything; both buyers lacked logic and professionalism.
Those initial meetings are best held after hours to keep things discreet. It’s smart to maintain a low profile early in the process. As part of due diligence, some buyers may ask to spend time working in your business before committing. Avoid this. It can backfire quickly, unsettling your staff and jeopardising the deal. Let your broker take the lead and control the pace.
What’s my business worth? How much does a business usually sell for?
It’s important to be realistic with your sale price.
Many people think that their business is worth all the money they have thrown at it, irrespective of its profit margins, while others believe their business is worth whatever potential profits they think it has, without much clear evidence to back it up.
Your mindset matters here. Listen to your broker’s advice, and if you’re unsure, get a second or even third opinion. If your broker values your business at around $500,000, your negotiations should stay within that ballpark. Pushing for over $1 million when the numbers don’t support it will only waste your time and energy.
Try and get comparable sales or current marketplace value – a price that similar businesses have sold for. Your broker would have this information.
At the end of the day, your business is worth what someone is willing to pay for it. No buyer will invest $1.5 million in a business making $100,000 a year. Business sales are complex, and buyers factor in much more than just numbers; risk, workload, and even lifestyle changes all play a part in their decision.
How Is a Business Valued?
There are a few different ways to calculate the value of a business, and each industry tends to use its own formula. Your broker will walk you through which method applies best to yours.
The most common approach is the earnings multiplier method.
In simple terms, you multiply your yearly net profit or EBITDA by a certain number of years (aka the multiplier). The amount of years varies amongst industries.
A common multiplier is 3.
So, if your adjusted average net profit over the last three years is $150,000, your business would be valued at around $450,000. On top of that, you’d also get paid for your stock. For example, if you’re selling a retail clothing store, the buyer pays for the business plus the stock on hand.
Buyers will also assess their ROI (Return on Investment), essentially how long it will take them to recover what they’ve spent. A solid ROI is usually around three years.
Negotiations
When it comes to negotiations, let your business broker take the lead. They’re the buffer between you and the buyer and know how to keep the process professional and on track. Through your broker, you’ll negotiate both the sale price and the terms of the deal.
If there’s anything you don’t fully understand, don’t guess; get advice from your broker, your lawyer, or both. That’s what they’re there for.
Here are some of the key things you’ll likely negotiate:
- Sale price
- Deposit amount
- Settlement date
- Due diligence timeframes and what they cover
- Warranty period on the business
- When staff can be informed
- Training period for the buyer
- Contract terms / heads of agreement
- Exclusivity period once a deposit is paid
- Restraint of trade: how long and where you agree not to compete against the buyer in the same industry
Deposit & Due Diligence
Once you’ve finalised negotiations and agreed on both the price and terms, the next step is to draw up a Heads of Agreement and take a deposit. This deposit is usually held in a trust account by your lawyer or business broker.
From there, the process moves into due diligence. This is where the buyer takes a deep dive into your business to make sure everything checks out. They’ll review your financials, contracts, operations, and anything else that could affect their investment. It’s their way of confirming that the business is solid and that there are no hidden surprises.
In our case, this stage took around two to three weeks, with the buyer’s accountant going through every line of our books. It’s detailed and sometimes intense, but it’s also a sign that things are moving in the right direction.
Telling Your Staff & Suppliers
At the start of the sale process, keep things quiet. There’s no need to create unnecessary stress or uncertainty among your team before anything is final. People naturally fear change, and early disclosure can cause anxiety or even disrupt operations. Your goal is to keep the transition smooth for everyone, including the buyer.
If you have key people or senior managers, it’s wise to tell them first once the sale becomes likely. They can help you manage communication and support the team during the handover.
Be mindful of timing, too. If employment contracts need to be terminated and reissued under the new owner, the standard legal notice period applies. Plan for this.
I told our staff about four weeks before settlement. On that same day, I arranged for the new owner to visit for an informal chat and to reassure everyone that their jobs were secure and employment would continue without interruption. It was the best way to ease any uncertainty and build trust.
Once your team is informed, the next step is to notify your suppliers. Set up introductions with the new owner and your service providers to ensure a smooth handover and continued business relationships.
Transferring your business
Your broker and lawyer should guide you through every step of the sale process, right up to settlement day. Ideally, they’ll both be with you when it happens to make sure the transition goes smoothly. Settlement day can be exciting, stressful, and emotional all at once. That’s where your broker earns their keep; keeping things steady on both sides.
Rule number one: do not transfer anything before settlement is complete. If settlement is scheduled for 3:00 p.m., stick to that time. Don’t hand over passwords, documents, or keys until the funds have cleared and are sitting safely in your account. Not even five minutes before. Things usually go fine, but what if they don’t? Protect yourself.
Make a checklist of everything that needs to be transferred, cancelled, or finalised. It’s easy to overlook the small stuff when your focus is on the finish line.
Here are some examples to include:
- Transfer your business name, and cancel your ABN if applicable
- Transfer any intellectual property or trademarks
- Transfer domain names, websites, and social media accounts
- Update or transfer utilities, internet, and phone services
- Finalise taxes and any business activity statements
- Transfer or close WorkSafe cover
- Update insurance policies
- Cancel your merchant facility and any other online payment systems
- Cancel or transfer subscriptions linked to the business
- Remove your credit card details from business-related accounts
- Transfer staff entitlements to the new owner
- Provide a full supplier and contact list
- Give the new owner a walkthrough. Show them where the power boards, switches, and systems are.
And yes, don’t forget to hand over the key to their new business. It’s simple, and you’d be surprised how often it’s forgotten.
Once the dust settles, it’s time to think about what comes next. Be mindful that the sale of a business may attract capital gains tax. A smart way to minimise your tax bill might be to roll some of the proceeds into your superannuation fund; but always check with your accountant or financial advisor first.
Tips for Both the Buyer and the Seller
A successful handover isn’t about walking away; it’s about setting each other up to win. You don’t drop the baton mid race. Hand it over clean and let the next runner win.
💡TIP to Seller:
Stick around for the first month to help the new owner transition smoothly into the business. I know you’re probably itching to cash in those miles and start your next big trip, but try to keep a line of communication open.
Remember, this is a huge moment for them; they’ve just invested a fortune and might feel like they’re swimming in deep waters. A bit of kindness and patience goes a long way. You built this from scratch; naturally, you want to see it thrive in new hands.
Then, once they’ve found their rhythm, go book that much deserved vacation and fly First Class. You’ve earned it.
💡TIP To Byer:
Use your first three months to observe, learn, and settle in. Get familiar with the business systems, the workflow, and most importantly, your new team. People need reassurance that nothing drastic is about to change.
Change can be unsettling, for them and for you. So, take your time, earn their trust, and create stability before you even think about tweaking anything.
Here’s one golden rule: do not change a thing for the first 12 months.
One of the biggest mistakes buyers make is thinking they can “save money” by changing how things are run. Don’t. The business is profitable because of the systems already in place. Touch the wrong link in the chain and you could derail the whole thing.
Watch. Listen. Learn. Then act.
And if you’re coming from a corporate background, be ready for a reality check. Running a small business is a whole new ball game. You’ll need to work on and in the business. Your experience is valuable, but remember, those corporate resources you once had behind you are now coming out of your own pocket.
Finally, always seek advice from licensed, experienced professionals when buying or selling a business. Everything I’ve shared here comes from experience, not a textbook. Use it as a guide, not gospel.
Selling your business is the bonus step in my 5 Basic Step Guide on how to run a successful business. I’ve included it because, for many of us, selling is part of the bigger picture – the ultimate exit strategy. It certainly was for me.
Feel free to explore the other five steps below for more insight, or scroll a little further down to easily navigate the rest of my site. Every section is packed with practical, real-world advice, the kind that comes from experience, not theory.
It’s essential to understand these 5 steps and their content as they are the foundation of running a successful business. Practical real-business life information that every business owner needs to know.
✍️ About The Author
From building a thriving company to mastering the frequent flyer game, Cranky Boss has learned that in both business and travel, the journey teaches more than the destination. A Melbourne Business Awards finalist with a knack for building strong teams and keeping things real, Cranky Boss shares the wins, the mishaps, and the occasional “OMG” moments along the way.
Today, Cranky Boss brings real stories, sharp insights, and a grounded perspective from the boardroom to the boarding gate.
Read more about Cranky Boss →
✍️ Quick Facts
Miles flown: Closing in on one million | Hidden talent: Turning frequent flyer points into first class tickets | Coffee strength: Dangerously high | Office pet peeve: Speakerphone calls | Business mantra: Culture first, profit follows | Superpower: Understanding people before they speak.
